Because stock trading is full of opportunities for traders to take advantage of their positions, the law takes accusations of fraud very seriously, but it works the other way, too. Traders have to work hard to protect their reputations because their livelihood depends on it. As a result, stock traders tend to react quickly if they’re ever accused of insider trading or any other forms of fraud.
According to a recent defamation lawsuit, Allstate allegedly falsely accused four traders of illegally taking advantage of their insider trading knowledge by intentionally timing trades in such a way that would inflate their own bonuses. Daniel Rivera, the managing director of Allstate’s equity division, along with three senior portfolio managers, were the four employees accused and fired as a direct result of those accusations.
In October 2009, Allstate announced the work of its equity division would be outsourced to Goldman Sachs. In December of that same year, it fired Rivera and his three senior portfolio managers (Kensinger, Meacock, and Scheuneman) for allegedly violating Allstate’s code of ethics. Because the four employees were supposedly fired with cause, they were not eligible for severance pay. The timing is certainly suspicious, but if Allstate did this as an to save money and avoid paying four senior employees their severance packages, the plan, if this was the plan, a fact which Allstate surely denies, then the plan backfired.
In addition to firing the four employees for alleged misconduct, Allstate also filed its annual 10-K form with the Securities and Exchange Commission and sent a memo to approximately 355 employees in its investment department. Both the filing and the memo allegedly revealed the company’s investigation into the alleged misconduct, along with sufficient details to identify the four employees who had been fired and accused of violating Allstate’s code of ethics.
The filing and the memo both claimed Allstate had used a third party to conduct the investigation into the alleged misconduct, but the four employees said they never received a copy of the investigation report. As a result, they sued their former employer for defamation and for violating the Fair Credit Reporting Act (FCRA) by failing to provide them with a copy of the report that allegedly revealed their misconduct. The four former employees allege they have all been either unemployed or underemployed since they were fired from Allstate as a direct result of Allstate’s alleged defamation of their character and their work as stock traders.
The parties attempted to settle the lawsuit outside of court, but were unable to come to an agreement. Instead, they argued the legal dispute before a jury, which sided with the four traders. Allstate has been ordered to pay millions to each plaintiff as well a $1,000 to each of them for violating the FCRA by filing a report that the jury found contained false and defamatory information regarding the work of each plaintiff, plus individual awards for compensatory and punitive damages, which vary depending on the claims of each plaintiff.
All told, the jury has ordered Allstate to pay more than $27 million to the four former employees, and that doesn’t even include the punitive damages the judge will add for violating the FCRA. But an attorney for the plaintiffs has released a statement saying that, although they are certainly grateful for the money, it was not their true motivation for filing the lawsuit. All they really wanted was to clear their names and this ruling has accomplished that.
Our Chicago libel and slander lawyers concentrate in this area of the law. We have defended or prosecuted a number of defamation and libel cases including cases representing a high profile athlete against a well known radio shock jock, a consumer sued by a large car dealer in federal court for negative internet reviews and videos, one of Loyola University’s largest contributors when the head basketball coach sued him for libel after he was fired, a lawyer who was falsely accused of committing fraud with the false allegation published to the Dean of the University of Illinois School of Law where the lawyer attended law school and the President of the University of Illinois.
Our Chicago defamation attorneys defend individuals’ First Amendment and free speech rights to post on Facebook, Yelp and other websites information that criticizes businesses and addresses matters of public concern. Our Chicago Cybersquatting attorneys also represent and prosecute claims on behalf of businesses throughout the Chicago area including in Rockford and Orland Park who have been unfairly and falsely criticized by consumers and competitors in defamatory publications in the online and off line media. We have successfully represented businesses who have been the victim of competitors setting up false rating sites and pretend consumer rating sites that are simply forums to falsely bash or business clients. We have also represented and defended consumers First Amendment and free speech rights to criticize businesses who are guilty of consumer fraud and false advertising.
Super Lawyers named Chicago and Oak Brook business trial attorneys Peter Lubin and Vincent DiTommaso Super Lawyers in the Categories of Class Action, Business Litigation and Consumer Rights Litigation. DiTommaso-Lubin’s Oak Brook and Chicago business trial lawyers have over a quarter of century of experience in litigating complex class action, consumer rights and business and commercial litigation disputes. We handle emergency business law suits involving injunctions, and TROS, defamation, libel and covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud or defamatory attacks on their business and reputations.
DiTommaso-Lubin’s DuPage County defamation and slander lawyers near Schaumburg and Hinsdale have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Downer’s Grove and Glen Ellyn, we serve clients throughout Illinois and the Midwest.
If you are the victim of a defamatory attack on your business or a consumer who has been sued to stop you from posting criticism of a business on line at Yelp or anywhere else, contact one of our Oak Brook and Chicago defamation lawyers for a free consultation at (877) 990-4990 or online by filling out our contact us form.